Hacker v. United States

Appeal from the United States Court of International Trade in case No. 07-00008, Senior Judge Thomas J. Aquilino, Jr.

The opinion of the court was delivered by: Mayer, Circuit Judge.

Before DYK, MAYER, and SCHALL, Circuit Judges.

Larry J. and Nancy A. Hacker appeal a judgment of the United States Court of International Trade sustaining a decision by the United States Department of Agriculture ("USDA") denying their application for trade adjustment assistance ("TAA") cash benefits. See Hacker v. United States, 31 Int'l Trade Rep. 1632 (Ct. Int'l Trade 2009). We affirm.

BACKGROUND

The Hackers are farmers who harvest Concord and Niagara grapes in Berrien County, Michigan. After a 2001 drought destroyed a significant portion of their grape crops, they received an $80,000 disaster relief payment from the USDA. The Hackers applied for this payment on December 5, 2003, and received it on May 17, 2004.

In 2004, grape farmers in the United States were faced with an influx of low-priced grapes from Argentina. Accordingly, in March 2006, the Secretary of the USDA certified Michigan Concord grape producers for TAA benefits for the 2004 marketing year. See 71 Fed. Reg. 14,677 (Mar. 23, 2006). The Hackers thereafter timely applied for TAA cash benefits, but their application was denied on the ground that they had failed to establish that their net farm income had declined between 2003 and 2004.

The Hackers then appealed to the Court of International Trade pursuant to 19 U.S.C. § 2395 and 28 U.S.C. § 1581(d)(4). Subsequently, pursuant to an agreement by the parties, the Court of International Trade remanded the case to the USDA. On April 10, 2007, the USDA issued a remand determination, rejecting the Hackers' application for TAA benefits on the ground that their net farm income, as reported on their federal income tax returns, had not declined between 2003 and 2004. The Hackers then filed an amended complaint with the Court of International Trade and moved for judgment upon the agency record. They argued that the USDA should not have relied solely upon their income tax returns in determining whether their net farm income had declined and that the agency erred in including the $80,000 disaster relief payment in calculating their 2004 net farm income. The Court of International Trade rejected these arguments, however, and sustained the USDA's decision denying the Hackers' application for TAA cash benefits.

The Hackers then timely appealed to this court. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

DISCUSSION

The Trade Act of 1974, Pub. L. No. 93-618, 88 Stat. 1978 (1975), provided TAA benefits to U.S. workers who had been adversely affected by foreign competition. This trade assistance program was made available to farmers in 2002. See Trade Act of 2002, § 141, Pub. L. 107-210, 116 Stat. 933, 946-53. Congress recently made significant changes to the TAA program pursuant to the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, §§ 1856, 1881-94, 123 Stat. 115.*fn1

In 2006, when the Hackers applied for TAA benefits, a farmer seeking to qualify for cash assistance was required to: (1) establish that he belonged to an industry certified by the Secretary of the USDA as having been harmed by increased volumes of low-priced imports, (2) show that he met certain gross income limitations, and (3) demonstrate that he had suffered a decline in "net farm income" in the year for which he was seeking benefits. See 19 U.S.C. § 2401e (2006).

The only issue presented on appeal is whether the Court of International Trade correctly upheld the USDA's determination that the Hackers' were ineligible for TAA cash benefits because their net farm income was higher in 2004 than it was in 2003. The Hackers acknowledge that their net farm income, as reported on Schedule F of their federal income tax returns, was higher in 2004 than it was in 2003. They argue, however, that they are entitled to TAA cash benefits because the USDA should have recalculated their income on an accrual basis, thereby shifting the $80,000 disaster relief payment they received in 2004 to an earlier tax year.

We find this argument unpersuasive for several reasons. First, because the USDA's regulatory definition of "net farm income" was promulgated pursuant to an express delegation of congressional authority, it is entitled to broad deference from this court. Second, as we explained in Steen v. United States, the TAA statute was intended to provide cash benefits to those farmers and fishermen who had suffered an "overall loss in their farming (or fishing) income" as a result of competition from imported goods. 468 F.3d 1357, 1362 (Fed. Cir. 2006). Because the Hackers' total net income from all farm sources increased, rather than decreased, between 2003 and 2004, they did not suffer an "overall loss" in their farming income. Finally, even assuming arguendo that the USDA had an obligation to consider whether a TAA applicant's net farm income had declined when calculated on ...

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